Greenpeace contended that the state made a mistake in February 1999 when it found that BP Exploration (Alaska) Inc.'s Northstar project was consistent with guidelines in the state's coastal management program.

It said the state was required to conduct a more rigorous analysis of the potential effects of the Northstar project, and only reviewed parts of the project instead of the whole thing.

"The process worked the way it was supposed to," said Daren Beaudo, spokesman for BP Exploration (Alaska) Inc. "We are pleased that the state Supreme Court and the Superior Court before both agreed that BP and the state have correctly followed the consistency determination review process."

Greenpeace has been fighting the Northstar project for years. It maintains that BP in Alaska would be unable to clean up a large oil spill in the Beaufort Sea. And it has said the underwater pipes are untested in Arctic conditions.

The estimated 175-million-barrel field of recoverable oil is the first offshore oil field off Alaska's northern coast. Drilling is done on a manmade island six miles offshore, and oil is pumped to shore through a 6-mile-long pipeline. Northstar began production in November 2001. It is averaging about 60,000 barrels a day and there have been no spills, Beaudo said.

In 1999, a judge rejected an attempt by Greenpeace to stop work on an ice road to Northstar. In 2000, Greenpeace activists staged several protests, and eight people were arrested on trespassing charges after showing up at Northstar facilities. Seven Greenpeace protesters later were arrested on a barge headed to Northstar.

A federal judge issued a restraining order in August 2000 that said Greenpeace activists must stay 200 yards away from Northstar facilities.

Alaska Attorney General Gregg Renkes said the latest legal victory against Greenpeace is "extremely important" because it improves the climate for oil and gas development in the state.

"This is all about increasing responsible exploration, more oil in the pipeline and more jobs and resources for Alaska," he said in a statement.

Greenpeace spokesman Melanie Duchin said Thursday the group had not had a chance to review the decision and would not comment until Monday.

BP was required to get permits from at least four state and five federal agencies, the court said. As part of that process, the Division of Governmental Coordination - a branch of the governor's Office of Management and Budget - reviewed the project to determine if it was consistent with the coastal management program.

The division in 1999 found that the project was consistent with the coastal management program. Greenpeace appealed to Superior Court and lost.

Greenpeace argued that the state should have analyzed the "cumulative impacts" of the project. But the Supreme Court found that Alaska law is largely silent on that issue.

Alaska standards do require that the review process take into account "a project's known and predictable effects," but "does not require the DGC to speculate about unknown and unpredictable future events," the court said.

The court also found that Greenpeace did not prove its claim that the state division issued certain permits too soon, allowing work to begin on the project before the review was completed.